www.fairlabor.org 1

Improving Workers’ Lives Worldwide

The SCI was developed by FLA, an organization of

colleges and universities, civil society organizations,

and companies that are committed to protecting

the rights of workers around the world. This

methodology was developed directly in response to

DI¿OLDWHV¶�QHHG�IRU�D�PRUH�HIIHFWLYH�VRFLDO�FRPSOLDQFH�V\VWHP��DQG�PDQ\�RI�)/$¶V�OHDGLQJ�FRPSDQ\�DI¿OLDWHV�DQG�VWDNHKROGHUV�FRQWULEXWHG�WKHLU�WLPH�and effort to develop, test and validate the system.

Why do we need the SCI?Since 2003, the FLA has conducted more than 800

independent social audits around the world, and

has analyzed the results to uncover what works (and

ZKDW�GRHVQ¶W��IRU�LPSURYLQJ�ODERU�SUDFWLFHV�DQG�conditions. We have found that the conventional

framework for conducting audits is useful for

remedying immediate problems in the workplace

and has, over time, succeeded in protecting workers

from the most egregious violations of labor ethics.

However, conventional audits do little to prevent

recurring violations or drive sustainable and

progressive improvements in working conditions.

Audits typically follow a “checklist” methodology,

meaning that auditors check for the presence or

DEVHQFH�RI�VSHFL¿F�FRQGLWLRQV�DQG�SUDFWLFHV�VSHOOHG�out in a code of conduct. Companies then work with

manufacturers to resolve code violations, such as

improving lighting, replacing abusive supervisors, or

providing safety equipment.

The problem with this approach is that these

³¿[HV´�GRQ¶W�KROG��,Q�WLPH��WKH�OLJKWLQJ�DQG�VDIHW\�HTXLSPHQW�ZHDUV�RXW�DQG�LVQ¶W�UHSODFHG��RU�DQRWKHU�abusive supervisor is hired. Because the underlying

SROLFLHV�DQG�SUDFWLFHV�DUHQ¶W�DGGUHVVHG��WKH�IDFWRU\¶V�QH[W�DXGLW�RIWHQ�XQFRYHUV�YHU\�VLPLODU�SUREOHPV��

,Q�HIIHFW��WKHVH�³FDWFK�DQG�¿[´�DXGLWV�DGGUHVV�WKH�symptoms of bad labor practices, without addressing

WKH�XQGHUO\LQJ�ÀDZHG�SUDFWLFHV�WKHPVHOYHV��)XUWKHUPRUH��NQRZLQJ�H[DFWO\�ZKDW�³UHG�ÀDJV´�auditors are looking for makes it relatively easy for

factories to implement the letter, but not the spirit,

of ethical codes.

7KH�6&,�LV�GHVLJQHG�WR�PRYH�WKH�¿HOG�RI�VRFLDO�compliance beyond cat-and-mouse games and

EDQG�DLG�¿[HV��(DFK�6&,�DVVHVVPHQW�UHVXOWV�LQ�sustained improvements in employment systems

DQG�SUDFWLFHV�VR�WKDW�H[LVWLQJ�FRGH�YLRODWLRQV� are addressed and future code violations are

minimized. This system of assessment will help

LPSURYH�ZRUNHUV¶�OLYHV�LQ�¿YH�VLJQL¿FDQW�ZD\V�

�� %\�JDXJLQJ�XVXDO�DQG�QRUPDO�ZRUNLQJ�FRQGLWLRQV�rather than a snapshot on a particular day, the

SCI reduces the likelihood of cheating the system

or masking ongoing problems.

SUSTAINABLE COMPLIANCE METHODOLOGYThe Fair Labor Association’s (FLA) Sustainable Compliance methodology (SCI) advances workers’ rights by e!ecting progressive and sustained improvements in employment practices and working conditions.

www.fairlabor.org 2

�� 7KH�6&,�XQFRYHUV�URRW�FDXVHV�RI�SUREOHPV�DQG�provides systemic, sustainable solutions so that

SUREOHPV�DUH�¿[HG�LQ�D�ODVWLQJ�ZD\�

�� 7KH�6&,�PHDVXUHV�DQG�WUDFNV�LPSURYHPHQWV�LQ� working conditions, thus providing useful

information to conscientious buyers and civil

society organizations. It also creates incentives

for companies to continually improve their

labor practices rather than just meeting basic

requirements.

How it Works

The SCI departs from conventional auditing approaches in two main ways:

1. It looks at code violations in the context of a holistic picture of the factory’s employment practices. By relating code violations to weaknesses in underlying policies, practices or governance, the SCI shows how violations FDQ�EH�¿[HG�LQ�D�ODVWLQJ�ZD\�

2. It requires companies and manufacturers to collaborate to show progressive improvement on key aspects of labor management. The focus on tracking improvements in factory functions reduces the incentive to mask or gloss over underlying problems.

To understand how this works, compare it to how your doctor might handle a wellness visit:

++++

�� 7KH�6&,�PDNHV�PRQLWRULQJ�DQG�DVVHVVLQJ�easier for all stakeholders by providing

standardized assessments and scores that allow

for benchmarking, comparison and tracking

progress (either for individual factories or for an

HQWLUH�VXSSO\�FKDLQ��

�� 7KH�6&,�HPSKDVL]HV�ZRUNHU�IULHQGO\�management systems and greater participation

of workers in the formulation, implementation

and review of policies and will be a driver

towards greater awareness and inclusion.

www.fairlabor.org 3

SCI Tools7KH�6&,�V\VWHP�KDV�WKUHH�PDLQ�FRPSRQHQWV�

1. An assessment protocol based on how well a factory performs crucial employment functions such as recruitment,

hiring, determining and paying wages,

setting hours of work, and addressing worker

grievances. SCI assessors are trained to look

at all aspects of how a factory handles these

functions, such as whether or not there is a set

policy, how well that policy is communicated to

workers and line managers, how consistently it

is implemented, and how it impacts workers.

2. Standardized reporting tools that can be

used to generate scores on each employment

function. These are essential for benchmarking,

comparing and tracking progress over time.

3. A tool-chest of capacity building resources�WR�KHOS�)/$�DI¿OLDWHV�LPSURYH�WKHLU�internal monitoring systems and effect sustained

improvements in their supply chains. This

includes self-assessment protocols, online and

in-person trainings, and sample documents and

templates to facilitate remediation.

The SCI AssessmentAn SCI assessment is both deeper and broader

than a conventional audit. It has the following

FRPSRQHQWV�

�� 7KH�DVVHVVRUV�UHYLHZ�IDFWRU\�VHOI�DVVHVVPHQWV�and other management documents and confer

with local civil society organizations to identify

potential problem areas.

�� 7KH�DVVHVVRUV�PDS�WKH�IDFWRU\�VWUXFWXUH�DQG�ZRUNÀRZ�IRU�HDFK�HPSOR\PHQW�IXQFWLRQ��This tells the assessor what to look for and

ZKRP�WR�DVN�DERXW�LPSOHPHQWDWLRQ�RI�VSHFL¿F�components.

�� 7KH�DVVHVVRUV�WKHQ�FROOHFW�GDWD�WKURXJK�WDUJHWHG�management interviews and visual observation

of factory conditions.

�� $VVHVVRUV�FRQGXFW�RQ��DQG�RII�VLWH�LQWHUYLHZV�and survey factory workers to understand what

is actually happening in the workplace.

�� 7KH�LQIRUPDWLRQ�LV�HQWHUHG�LQWR�D�VWDQGDUGL]HG�reporting tool to generate factory scores, which

DUH�WKHQ�WUDQVODWHG�LQWR�¿QGLQJV�DQG�XVHG�WR�VHW�action priorities. These reports are published at

www.fairlabor.org/transparency.

How the SCI will be used(YHU\�\HDU��WKH�)/$�DVVHVVHV�KXQGUHGV�RI�IDFWRULHV�and makes the results available online. Starting in

2012, the FLA will use the SCI methodology for all of

these independent assessments. These assessments

will help brands and manufacturers to identify

priority areas for improvement. The FLA will also

conduct follow-up assessments on a sub-sample of

these factories to note how these changes are taking

hold.

0DQ\�)/$�DI¿OLDWHV�DOVR�KDYH�FRPSUHKHQVLYH�internal monitoring systems to track social

compliance across their supply chains. The FLA

LV�HQFRXUDJLQJ�DOO�RXU�DI¿OLDWHV�WR�DGRSW�WKH�6&,�methodology for their internal compliance function

DQG�ZLOO�IDFLOLWDWH�WKLV�DGRSWLRQ�WKURXJK�DQ�HI¿FLHQW�web platform and customized tools and protocols.

As more and more leading companies and brands

DGRSW�WKLV�PHWKRGRORJ\��LWV�EHQH¿WV�ZLOO�UHDFK�PRUH�factories and more workers.

FLA stakeholders believe that the impact of the SCI

PHWKRGRORJ\�ZLOO�H[WHQG�EH\RQG�WKH�$VVRFLDWLRQ��,Q�time, we hope that the SCI will become the industry

standard for monitoring social compliance and its

principles will be applied in other monitoring and

compliance systems. We believe that the social

compliance industry needs to be transformed to

better serve the interests of workers in globally

integrated supply chains, and the SCI is a big step in

that direction.